Tata to inject extra cash into Jaguar

The Indian owners of the Jaguar Land Rover car company have agreed to pump "tens of millions" of pounds into the ailing luxury brand, the Financial Times said.

22 December 2008

The Indian owners of the Jaguar Land Rover (JLR) car company have agreed to pump "tens of millions" of pounds into the ailing luxury brand to prevent a cashflow crisis, the Financial Times said.

The additional money from Tata Motors, which bought JLR earlier this year, would provide breathing space for the British government as it is considering state support for the group, said the FT.

But Tata was said to be determined that its support for the plant should not negate the argument that the British government should provide bridging loans and credit guarantees to help the company and the car sector as a whole through the current financial difficulties, the Financial Times said.

The British government has come under pressure to step in to aid the car sector following the massive assistance for carmakers in the US.

But Business Secretary Peter Mandelson has played down the prospect of a swift bail-out for the British car industry, saying that owner firms first had to "look to themselves."

The government is understood to be keeping in close contact with JLR as union leaders warn that tens of thousands of jobs could be lost at sites in the Britain's Midlands region.

The FT quoted an unnamed "government insider" as saying: "They (Tata) have managed to solve the immediate difficulties, so maybe they can resolve some others as well."

A spokesman for Mandelson's department said: "The government doesn't have an open cheque-book to bail out ailing companies, but we are doing all we can to help businesses overcome the current challenges."

"Jaguar Land Rover have owners who are well resourced and have the first responsibility to sustain the companies they own," a spokesman said.

However, some reports have suggested that a bail-out for the car industry in Britain could be negotiated early in 2009.

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